What are QTIP trusts?

Qualified terminable interest property trusts, also known as QTIP trusts, are trusts that allow the Grantor (the creator of the trust) to provide income for his or her surviving spouse after the Grantor’s death, while enabling the use (or partial use) of the unlimited marital estate tax deduction. While most QTIP trusts are created for estate tax purposes, they can also be used for remarriage risk concerns because the Grantor can structure the trust to preserve the principal of the trust for the benefit of his or her children, grandchildren, or other beneficiaries regardless of whether the surviving spouse remarries. There is one major catch - only the surviving spouse can benefit from the trust assets of the QTIP during his or her life. In other words, the children cannot directly benefit from a QTIP trust until the death of the surviving spouse. Otherwise, the unlimited marital deduction provision wouldn’t apply.

What are blended families?

In the United States, it is estimated that nearly half of Americans have been or will be included in a blended family at some point throughout their lifetime. Blended families are families that consist of a married couple with children from prior relationships - the most popular example being the Brady Bunch.